M&A activity within the sector continued to lag prior years on an overall deal value and volume basis. Coming off a relatively robust Q4 2018, deal volume and values decreased to their lowest quarterly level in the last three years. While Q1 tends to be a laggard on the overall year, Q1 2019 value of $15.6 billion was down 30% versus Q1 2018; on a volume basis Q1 2019 decreased 25% versus Q118. During Q1 2019 there was only one deal with value above $1.0 billion. Global economic uncertainty combined with ongoing geopolitical influences continue to put a drag on M&A within the sector. While there was some positive movement on certain of the ongoing trade disputes, there was no clarity on resolution. Going into Q2, resolution of trade disputes and some favorable economic data could help drive increased M&A activity.
“Q1 2019 M&A activity was off significantly from the same period in 2018. Economic uncertainty combined with ongoing trade disputes and related geopolitical tensions outweighed underlying solid sector fundamentals.”